Date Of Judgment 30-08-2018, Ita v. M/S. Sling Media Pvt. Ltd

IN THE HIGH COURT OF KARNATAKA, BENGALURU DATED THIS THE 30 DAY OF AUGUST 2018. PRESENT THR HON’BLEK DR.JUSTICE VINBBT KOTHARI ANT) THR HON’BLE MRS.JUSTICEK S.SUJATHA I.T.A. No.252/2018 BETWEEN : 1.PR. COMMISSIONEROF INCOME TAX-6OF INCOME TAX-6 BMTC COMPLEX, KORAMANGALA, BENGALURU. «|THERE DEPUTLY COMMISSIONEOF INCOME TAX, CIRCLE 12 (3),.BENGLAURU._ APPBLLANTS|OF INCOME TAX, CIRCLE 12 (3),.BENGLAURU._ APPBLLANTS| (BY SRI E.L.SANMATHI, ADV.) AND ; M/s. SLING MEDIA PVT. LTD.,PSS PLAZA No.6,WING TUNNEL ROAD,BBRENGLAURU 56005PAN: AACCD 0297 R._. RESPONDENT. THIS INCOMB TAX APPBAL IS FILED UNDER SECTION|2600-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDERDATED 27.10.2017 PASSED IN IT/TP|A No.2953/BANG/2014, FORTHE ASSESSMENT YEAR: 2009-2010, PRAYING TO: DECIDE THEFOREGOING QUESTION OF LAW AND/OR SUCH OTHERQUESTIONS OF LAW AS MAY BE FORMULATED BY THEHON BLE COURT AS DEEMED FIT AND SHI ASIDE THEAPPELLATE ORDER DATED: 27.10.2017 PASSED BY THE Date of Judgment 30-08-2018, ITA No.252/2018 Pr. Commissioner of Income Tax-6 & Another Vs. M/s. Sling Media Pvt. Ltd., INCOME TAX APPELLATE TRIBUNAL, ‘A’ BENCH, BANGALORE,|IN APPEAL PROCEEDINGS NO. IT/TP|A No.253/BANG/2014 FOR:ASSESSMENT YEAR: 2009-2010, AS SOUGHT FOR IN THISAPPEAL. THIS APPEAL COMING ON FOR ORDERS, THIS DAY,|S. SUATHA, J., DELIVERED THE FOLLOWING: JU DGMENT Mr. E.I.Sanmathi,Adv. for Appellants — Revenue. This Appeal is filed by the Revenue purportedlyraising substantial questions of law arising from theOrder of the Income Tax Appellate Tribunal, Bangalore Bench ‘A’, Bangalore, inIT[TP|A No.253/Bang/2014 dated|2'7.10.201, relating to the Assessment Year2009-10. a2The substantial question of law framed by the Revenue in the Memorandum of Appeal is as under: “WhetherOTFthe factsandin|thecircumstances of the case and in law, theTribunal was right in excluding comparable’snamely, M/s. Bodhtree Consulting Ltd and M/s.Kals Information Systems Ltd., as comparableson functional dissimilarity?” Date of Judgment 30-08-2018, ITA No.252/2018 Pr. Commissioner of Income Tax-6 & Another Vs. M/s. Sling Media Pvt. Ltd., 3.The learned Tribunal, after discussing the rival contentions of both the Appellants-Revenue andRespondent-Assessee, has returned the findings asunder: “QWe heard rival submissions andperused the material on record. The issue ofcomparability of KALS Information Systems Ltd.,/Seg./ had come up for consideration before theco-ordinate bench of Tribunal in the case ofCISCO Systems [India] Put. Ltd., [Supra] whereinit has been held as under: KVeVNKK” The comparability of Bodhtree Consulting|Co., with a_ software development servicescompany such as the Assessee for AY 09-10 was|considered by this Tribunal in the case of M/s.C1scosystems[IndtayPut.Ltd.,IT/ITPIANo.271/Bang/2014 for AY O9-10 order dated14,.8.2014. This Tribunal held as follows: KVeVNKK” Respectfully following the above decisions,we direct deletion of KALS Information Systems Date of Judgment 30-08-2018, ITA No.252/2018 Pr. Commissioner of Income Tax-6 & Another Vs. M/s. Sling Media Pvt. Ltd., Ltd., and Bodhtree Consulting Co., from the list of|comparables. ” 4However, this Court in a recent judgment in I.T.A. Nos.536/2015 c/w 537/2015delivered on 25.06.2018 (Prl. Commissioner of Income Tax & Anr. —v- M/s Softbrands India Pvt. Ltd.») has held that inthese type of cases, unless an ex-facie perversity in thefindings of the learned Income Tax Appellate Tribunal is"established by the appellant, the appeal at the instanceof an assessee or the Revenue under Section J60-A otthe Act is not maintainable. The relevant portion of the said judgment is.quoted below for ready reference: “Conclusion: 55.|Asubstantialquantumof|international trade and transactions dependsupon the fair and quick Judicial dispensation|in such cases. Had it been a case oOf|substantial questionof|interpretationof|provisions of Double Taxation Avoidance 4However, this Court in a recent judgment in I.T.A. Nos.536/2015 c/w 537/2015delivered on 25.06.2018 (Prl. Commissioner of Income Tax & Anr. —v- M/s Softbrands India Pvt. Ltd.») has held that inthese type of cases, unless an ex-facie perversity in thefindings of the learned Income Tax Appellate Tribunal is"established by the appellant, the appeal at the instanceof an assessee or the Revenue under Section J60-A otthe Act is not maintainable. The relevant portion of the said judgment is.quoted below for ready reference: “Conclusion: 55.|Asubstantialquantumof|international trade and transactions dependsupon the fair and quick Judicial dispensation|in such cases. Had it been a case oOf|substantial questionof|interpretationof|provisions of Double Taxation Avoidance Date of Judgment 30-08-2018, ITA No.252/2018 Pr. Commissioner of Income Tax-6 & Another Vs. M/s. Sling Media Pvt. Ltd., 5/7 Treaties (DTAA), interpretation ofprovisions ofthe Income Tax Act or Overriding Effect of the|Treaties over the Domestic Legislations or the |questions like Treaty Shopping, Base Erosionand Profit Shifting (BEPS), Transfer of Shares|in Tax Havens (like in the case of Vodafone|etc.), uf based on relevant facts, such|substantial questions of law could beraised before the High Court underSection260-Aof the Act, the Courts could have|embarked upon such exercise offraming and|answering such substantial question of law.On the other hand, the appeals of the present|tenor as to whether the comparables have|been rightly picked up or not, Futers for|arriving at the correct list of comparables|have been rightly applied or not, do not in our|consideredopinion, giveriseTo anysubstantial question of law. 06. Weare therefore of the consideredopinion that the present appeals filed by the|Revenue do not give rise to any substantialquestionof|law.andthe|Suggested|substantial questions of law do not meet the Date of Judgment 30-08-2018, ITA No.252/2018 Pr. Commissioner of Income Tax-6 & Another Vs. M/s. Sling Media Pvt. Ltd., 6/7 requirements ofSection 260-A|of the Act andthus the appeals filed by the Revenue are|found to be devoid of merit and the same are.liable to be dismissed. 57. We make it clear that the same'§yardsticks and parameters will have to beapplied, even tf such appeals are filed by the|Assessees, because, there may be cases.where the Tribunal giving its own reasons|and findings has found certain comparables|to be good comparables to arrive at an|7s | “A Length Price“ in the case of the assesseeswith which the assessees may not be|satisfied and have filed such appeals beforethis Court. Therefore we clarify that mere|dissatisfaction with the findings of facts|arrived at by the learned Tribunal ts not at all|a sufficient reason to invoke.Section 260-Aof the Act before this Court. o8. The appeals filed by the Revenueare therefore dismissed with no order as to|costs.” Date of Judgment 30-08-2018, ITA No.252/2018 Pr. Commissioner of Income Tax-6 & Another Vs. M/s. Sling Media Pvt. Ltd., 7/7 5.Having heard the learned counsel appearing for the Appellants-Revenue, we are therefore of theopinion that no substantial question of law arises in the present case also. The Appeal filed by the Appellants-|Revenue is liable to be dismissed and it is dismissed|accordingly. No costs. Copy of this Order be sent to the Respondent-Assessee forthwith. NC. Sd/-.JUDGE. Sd/-.JUDGE.